by James A. Bacon
The landscape of innovation has been dominated in the post-World War II era by places like Silicon Valley and the Research Triangle, suburban corridors of disconnected corporate campuses, accessibly only by car. But a new model — the innovation district — is emerging, contend Bruce Katz and Julie Wagner with the Brookings Institution in “The Rise of Innovation Districts: A New Geography of Innovation in America.”
In recent years, a rising number of innovative firms and talented workers are choosing to congregate and co-locate in compact, amenity-rich enclaves in the cores of central cities. Rather than building on green-field sites, marquee companies in knowledge-intensive sectors are locating key facilities close to other firms, research labs, and universities so that they can share ideas and practice “open innovation.”
Innovation districts are emerging in cities across the United States and abroad. Most of them are located in the urban core, often older industrial areas, that are being “re-imagined and remade.” Others are arising in traditional suburban office parks, which are scrambling to compete. Continue Katz and Wagner:
Innovation districts represent a radical departure from traditional economic development. Unlike customary urban revitalization efforts that have emphasized the commercial aspects of development (e.g. housing, retail, sports stadiums) innovation districts help their city and metropolis move up the value chain of global competitiveness by growing the firms, networks and traded sectors that drive broad-based prosperity. Instead of building isolated science parks, innovation districts focus extensively on creating a dynamic physical realm that strengthens proximity and knowledge spillovers.
What is driving this shift? Katz and Wagner argue that the evolution of a knowledge- and technology-intensive economy is altering the value of density and proximity. Density and proximity accelerate the exchange of ideas, the transfer of knowledge and pace of innovation. No one company can master all the knowledge and all the disciplines it needs, so businesses increasingly rely upon networks of industry collaborators. The desire to embed themselves in these collaborative networks has driven many companies from the isolated suburban office campus to denser urban neighborhoods that can support such networks.
Another critical trend is the growing demand among workers for more walkable, mixed-use neighborhoods. This preference is particularly strong among young, tech-savvy workers coveted by innovative companies.
The Katz-Wagner paper is must reading for anyone who is convinced, as I been preaching, that the traditional economic development model in Virginia, which dates back to the 1960s-70s era, is outdated and not working anymore. Yes, Virginia can blame some of its current economic woes upon federal sequestration and budget cutting but the malaise runs deeper. Virginia’s economic performance has fallen from a national pace-setter to middle-of-the-pack. We have been slow to understand and respond to the changes that Katz and Wagner describe. We have been slow to innovate the institutions of economic development.
The City of Richmond’s futile pursuit of a baseball stadium and slavery museum in Shockoe Bottom is a perfect example of misplaced priorities. The irony is that, here in the Richmond metropolitan region, the city is better positioned than any of its suburban counterparts to take the economic lead. Proto-innovation districts are sprouting on the fringes of downtown, especially in Shockoe Bottom, Manchester and the Virginia Biotechnology Research Park. Downtown, with its walkable, bikable streets, its proximity to Virginia Commonwealth University, its diversity of housing types, its historic architecture and its cross-fertilization of science, business and the arts, is precisely where innovation districts logically would take hold. This is the economic future of the Richmond region. The ballpark hoo-ha suggests that city leaders just don’t get it.
Richmond’s suburbs, like suburban communities across Virginia, also need to take heed. Economic development no longer favors the green-fields. The logic of the knowledge-innovation economy favors walkable urban places. Virginia’s suburban counties are woefully short of such places. As the innovation-district movement gains momentum, suburban communities will find it more and more difficult to attract big commercial office projects to build their tax base. The writing is on the wall: Suburban counties need to create walkable, mixed-use, amenity-rich districts of their own or find themselves as disadvantaged in the economic development game as the cities were a half-century ago. Making that transition while protecting the integrity of neighborhoods full of single-family dwellings will be the great challenge of the next generation.
